There are lots of costs to cover when running a business. While some are obvious such as equipment costs, employee wages and marketing fees, others may go overlooked. To help you budget for all the necessary expenses, here are a few of the most common hidden costs to consider.
At the end of each year, it is essential that you pay tax on your earnings. When working for an employer, you often don’t have to worry about calculating this yourself – but when you’re self-employed, the duty to do this falls on you.
There are lots of tools online that can help you calculate self employment taxes. Your taxes need to be calculated accurately as there could be hefty fines if you make a mistake. Many businesses may benefit from paying for accounting software or outsourcing an accountant to help make bookkeeping easier.
There are various forms of business insurance that can be worth taking out to financially protect you against potential disasters. Worker’s compensation insurance is one particular scheme that is compulsory if you decide to hire employees.
There are business insurance packages that you can take out – these may offer multiple forms of coverage. It’s worth always shopping around to find the best rates. A business insurance broker may be able to help you find the best deal.
Your business may need to apply to certain licenses and permits in order to legally operate. These licenses and permits will cost money.
A few examples could include a food license if you plan to sell food, a music license if you plan to play music and an alcohol license if you plan to serve alcohol. A legal advisor may be able to help you to figure out exactly which licenses and permits you need. Some of these licenses and permits may need to be renewed.
On top of paying your employees wages, it could be important to consider certain employee benefits. Offering benefits such as sick pay, health insurance or holiday will attract employees and encourage loyalty. Once you’ve established these benefits, you must be able to afford them.
HR consultants may be able to help you put together an employee benefit package. You may be able to find discounts on things like workplace health insurance.
Many businesses borrow money – whether it’s to cover initial start-up costs or other costs along the way. Loan repayments can be an expense worth factoring in alongside other bills. It’s important that you pay back your debts so that they don’t increase.
When taking out loans, always compare interest rates. Banks tend to offer some of the best interest rates, although there are some private lenders that can offer equally good deals. There could also be options like business credit cards and lines of credit.